Spain's jobless rate hits record high

Spanish unemployment hit its highest level in the second quarter since the country's return to democracy in the mid-1970s, as firms shed more staff, driven by fears of prolonged recession and a crisis of confidence among consumers.

The jobless rate rose to 24.6 per cent from 24.4 per cent in the first quarter, the National Statistic Institute said on Friday, below a forcast of 24.9 per cent. The number of unemployed Spaniards rose to 5.7 million.

The headline figure was the highest since current records began in 1976, the year after Spain's dictatorship ended with the death of Francisco Franco.

Spain's economy has stagnated or been in recession since the beginning of 2008 after the labour-heavy property sector stalled as a glut of cheap credit dried up.

The latest recession, which began in the first quarter, is expected to last into next year while the government said last week it does not expect unemployment to fall much below 22 per cent until 2015 at least.

Consumer and business confidence has been badly dented by concerns that Spain may need a full sovereign bailout as nervous markets push the country's risk premiums to euro-era highs.

Almost a third of all those unemployed in the euro zone are in Spain, with young people the worst hit.

According to figures from EU statistics agency Eurostat, half of the country's people under 26 and available for work are unemployed.